(FE)
Finance minister Nirmala Sitharaman huddled with top public-sector and private bankers on Monday, the first of a series of meetings lined up with important stakeholders up to August 11, as the government sought to devise plans for critical sectors amid fears that the economy might be slipping into a protracted slowdown.
As per the plan, the minister and top finance ministry bureaucrats will meet representatives of MSMEs on Tuesday, auto sector on Wednesday, industry associations on Thursday, stock market and investor community on Friday, and real estate and homebuyers on Sunday.
The idea is to firm up swift corrective action plans for critical sectors to reverse the slowdown. The economic expansion already collapsed to a five-year low of 6.8% in FY19. It is forecast to only marginally improve in the current fiscal to 7%, provided private investors return and consumption expenditure rebounds.
Monday’s meeting focused on credit flow to various sectors, particularly to non-banking financial companies (NBFCs), automobiles and MSME, growth in which are faltering. While some of the NBFCs are facing solvency issues, sales of top five auto companies, including Maruti Suzuki, which account for 85% of industry sales, reported a 31% decline from a year before, inflating inventories. The stress in the NBFC sector, which accounted for a sizeable chunk of credit for automobiles purchases in recent years, following the IL&FS crisis has only aggravated the scenario.
